As you may have noticed recently, Lao Mei’s parade on the street has been in full swing, and there have been many places from the beginning of the peaceful parade to the back.
Suddenly seeing the picture of this kind of building being lit, I don’t know that Somalia or Syria was bombed by old Americans.
After burning, it is all kinds of smashing and robbing. Several big brands you know, such as GUCCI, LV, DIOR, have been robbed, and none of the five major brands have fallen.
Classmates who often squat on Ebay will be able to see these brand-name goods snatched by the Niggers sold in about a few days.
Many readers asked in the background why the United States suddenly made this happen. First of all, the new crown was unable to control the dead and wounded, and now there are riots all over the country.
If this continues, the lighthouse will not light up. Today we will mainly talk about this topic.
01 Historical Cycle Law
When talking about what happened in the United States recently, you must first make clear the underlying law of historical cycles.
Several articles related to the big crisis that Xiaochen has written before have actually dealt with the issue of periodic laws.
A common feature is summarized here. The fundamental reason for the rise and fall of the private economy is that due to different labor productivity, wealth will gradually gather in the hands of a few people.
When the polarization between the rich and the poor reaches the extreme, the bottom layer cannot provide purchasing power, and the top layer cannot make profits from the bottom layer, social conflicts erupt.
At this stage, all empires will generally be divided into separate bodies because of internal and external problems. This kind of thing is particularly common in ancient Chinese history.
This is why Fu Sinian and Fu Fatzi said in the study of ancient Chinese history that the Chinese nation will build an extremely powerful empire as long as it rests for 70 years.
After that, land and wealth will gradually gather towards the family and the rich. Eventually, because the gap between the rich and the poor is too large, they will fall into internal and external troubles and will barely maintain their disintegration after 200 years.
In fact, this is the basic law of the development of the private economy, whether it is the cycle of the ancient Chinese dynasty, or the rise and fall of Western powers after World War II.
The biggest difference between modern Western countries and ancient China is that they took another way to renew their lives.
The West generally adopts the methods of expanding colonies abroad and plundering profits to alleviate the domestic crisis, which is equivalent to injecting new resources into the entire society.
When Europe encountered the Great Depression in 1870, it was through neo-imperialism to expand colonialism to ease the crisis.
Later, the big crisis came again, and the colonies were almost divided. The powers could only fight for each other. This is how World War I came.
Before the Great Depression of the 1930s, the degree of monopoly in Britain, the United States, Germany, France and Japan was very high. Monopoly allowed wealth to continue to gather to the rich.
Most capitalist countries saw no hope during the Great Depression of the 1930s and faced the threat of domestic unrest.
The choice of countries such as Japan and Germany is to first use military industry to boost the economy. Later, it was discovered that aircraft and artillery cannot fill the people’s stomachs or repay debts to capitalists.
Countries that could not pay off their debts were going bankrupt. Eventually, they adopted external expansion and resolved the domestic crisis by setting off World War II.
As soon as the artillery rang, there were 20,000 gold. The backlog of aircraft and artillery stocks was quickly consumed, and the German and Japanese economies were alive again.
In other words, the threat of bankruptcy of the country forced Japan and Germany to follow the path of fascism.
The reason why the United States survived to become the world’s top power was also because of World War II. The war injected profits into the United States and saved excess capacity.
The destruction of World War II and the reform measures of post-war wealth dissipation have returned the mean value of wealth and reduced the inequality of wealth.
It can be clearly seen from the figure that the social wealth inequality quickly returned to the mean after World War II.
As of this writing, everyone should understand that the entire modern world history is an economic history.
The country is like a big company, whether it grows or declines mainly depends on the company’s operating conditions.
Because no matter the development and growth of enterprises, the expansion of mergers and acquisitions, or the cultivation of corporate culture and institutional self-confidence, financial support is needed.When the funds can’t make ends meet, the enterprise is almost finished.
Therefore, modern history is very simple. As long as you know where the money comes from, how the income and expenditure are, and the ins and outs, you can figure out more than half.
02 Special America
The United States is the most special one among the major capitalist countries. The overall situation facing the United States during the Great Depression was equally grim.
Other capitalist countries were either overwhelmed by the Great Depression or moved towards fascism. But the United States is not only alive, but also stronger.
The most powerful thing in the United States is that it has adopted some reforms that are both rich and poor, similar to the Roosevelt New Deal, which eased the pressure of the Great Depression.
That is to say, these reforms made the United States and America stand until the outbreak of World War II, and global industrial orders and gold flakes flew to the United States as the last winners.
For example, Roosevelt’s New Deal had a reform plan called “fortune for peace”. Nowadays, many people who view private property as overwhelmingly listen to this plan, and roughly scolded his eighth ancestors.
Roosevelt said at the time: “All I took was a piece of meat from you, so that these vulnerable groups would not take your life.”
Even if he only took a piece of meat, Roosevelt was extremely hated by the rich.
The oil king Rockefeller hated Roosevelt the most, and he was indignant when he heard his name, and he even stopped donating to the Republican Party for elections.
Because Roosevelt accused Rockefeller of being the culprit of the wealthy, and asked the federal court to issue huge fines to Rockefeller and ordered the dissolution of his oligopoly Standard Oil Company.
It can be seen that the maximum tax rate for the rich in the United States has increased significantly from the Roosevelt New Deal in 1930, and even reached 90% during World War II.
However, although measures to equalize the rich and the poor, such as heavy taxes, can narrow the gap between the rich and the poor in the short term, they can only be a transitional measure, because too high a tax rate is detrimental to investment stability and economic prosperity.
A high tax rate will reduce the profit margin that investors get, and will dampen investment enthusiasm. Investors are afraid and unwilling to make additional investments.
Moreover, the profits during the economic depression were already low, and the high income tax and capital tax were added, which obviously made the economy more difficult to recover.
In addition to the rich and the poor, the United States also tried many monetary and fiscal measures to stimulate the economy during the Great Depression.
Among them, the central bank used monetary easing as the lender of last resort to save the financial system, and the fiscal stimulus to save the economy has been used today.
You can observe that from the 2008 financial crisis to the present, the major countries in the world have actually used this set of policies.
In addition to the central bank’s various low-interest loans to the financial system, it is to engage in fiscal stimulus to save the economy.
However, these policies can only help the emergency, and cannot cure the economic crisis. The crisis itself has only been delayed and eased by various stimulus policies, the trend has not changed, and because of the accumulation of government debt, there will also be a new sovereign debt crisis.
What really saved the American economy during the Great Depression was the outbreak of World War II. Through various measures, the United States dragged others to unsustainability and dragged the war into full swing.
The massive amount of war orders has reinjected the US economy with a source of power and profit, making it the strongest Bluestar in one fell swoop.
This is why we always said before that the decade after the financial crisis in 2008 is very similar to the decade after 29.
Now the big powers are relying on various stimulus policies to push the problem back, and they all want to make it impossible for others to sustain the explosion.
Which big country explodes in another country can go up and divide the body and asset packs, and give yourself another 20 years of life.
Speaking of which, there must be someone asking, why did the big capitalists at that time restrain greed, let Roosevelt change the way of cutting the cake, and agree that Roosevelt used wealth for peace?
This is because the entire capitalist country is facing a grim situation. Except for the historical background of the Great Depression, the socialist Soviet Union on the other side of the European Iron Curtain began to become a strong competitor of Western countries.
On the one hand, the United States has fallen into a high depression, the unemployment rate is high, and the basic life of the people is not guaranteed, and they are hungry every day.
The following is a description of the miserable life of American people in the decade of the Great Depression in Glory and Dreams:
Millions of people are saved from death only because they live like animals.
The rural people of Pennsylvania eat wild grass roots and dandelions; the people of Kentucky eat violet leaves, wild onions, forget-me-nots, wild lettuce, and wild grasses that have been exclusively for cattle.
Mothers of children in the city wandered on the pier and waited, as soon as there were rotten fruits and vegetables thrown out, they went up to compete with wild dogs.
A chef in a hotel in the Midwest put a bucket of leftovers in the alley outside the kitchen, and immediately a dozen people rushed out of the darkness to grab it.
Excerpts from glory and dreams
On the other hand, when the West fell into the Great Depression and could not extricate itself, the planned economy of the socialist power of the Soviet Union was not affected by the economic crisis.
At this stage, the Soviet Union took advantage of the Western crisis to obtain a large amount of cheap resources and achieved overtaking in corners. At that time, the Soviet Union was the holy place in the hearts of the people who eat melons all over the world. More than 100,000 Americans applied for immigration.
For a time, the three self-confidences of Western mainstream ideology were smashed, and the citizens even began to doubt life. Every day we say that our system is superior, but we are hungry every day.
Under such domestic and foreign difficulties, if the US government does nothing to allow the situation to develop, there will be turmoil and war in the country.
Either Japan or Germany wage wars abroad, or the country is divided.
The wealthy people in the country are also aware of this, which is the historical background that the New Deal of Roosevelt can implement.
In addition to fiscal and monetary stimulus, the core of the New Deal is to equalize the rich and the poor. The government acts as a coordinator of interests and strongly changes the excessive imbalance in the process of dividing the cake.
The trade union organizations and various social welfare institutions that are often heard by people are created in this context.
The birth of the western welfare society is fundamentally because of the strong pressure brought by the Soviet Union, and history is so strange.
After the Second World War, the rise of the Soviet Union was facing a second round of competition between the two systems. At this time, making concessions to the working class became an inevitable choice.
Most middle class may not know that they can enter the stage of history with a brand-new attitude, largely due to the Soviet Union.
03 Mean Regression
After talking about the historical background of Roosevelt’s average wealth, we talk about why the gap between rich and poor will return to the average after World War II.
It can be clearly seen from the figure that the proportion of social wealth occupied by the top 10% of people after World War II is declining rapidly.
Everyone knows that land is the ultimate wealth. After the Second World War, all countries basically carried out land reform to equalize the rich and the poor.
Apart from the land reform, the dismissal of the chaebol in the later period in Japan, Germany’s “equal sharing law” on war losses, and France’s seizure of assets during the fall period and the vigorous implementation of nationalization have all played a significant role in the equalization of the rich and the poor.
After the disintegration of the Soviet Union in the 1990s, the gap between the rich and the poor began to widen without any suspense, and the middle class in the United States became poorer from then on.
It can be clearly seen from the chart below that the proportion of the wealth represented by the red line on the part of the workers has been declining since the collapse of the Soviet Union in the 1990s.
The Soviet Union is disintegrated, the big capitalists have no external problems, and there is no need to make concessions to ordinary people.
So under peaceful conditions without external pressure, will the United States adopt reforms similar to the Roosevelt New Deal and try to narrow the gap between the rich and the poor?
What we have seen so far is not the reform measures of equalizing the rich and the poor, but the Trump tax cuts that continue to widen the gap between the rich and the poor.
The gap between the rich and the poor in the United States and the world as a whole once again reached the limit, again reaching the alarming level of 1929.
It is only a matter of time before the world is plunged into a major crisis again. The threat of the Great Depression and war will soon be faced.
The mean return is the ultimate law of the universe, which is not changed by human power.
If the rich people refuse to use the money to help the poor, the world will have a way to balance it.
04 What is the essential problem
The riots in the United States seem to be due to the racial discrimination caused by black people being killed by white policemen. In fact, they are essentially the problem of differentiation between rich and poor.
Is it strange for Americans to go to the streets from peaceful marches to smashing and burning?Not surprising at all, because we have come to a turning point in history.
The income of ordinary people in the United States has not increased for more than 30 years. The red line in the figure below is the proportion of the underlying wealth, and the blue line is the proportion of the wealth of 0.1% of the elite in society.
The polarization between the rich and the poor was already high in 2017, and it should now be infinitely close to the Great Depression.
The sudden epidemic further exacerbated the polarization between the rich and the poor in the whole society. The blacks were crushed by the police to fight against racial discrimination, but it was the fuse that broke out.
The parade in Los Angeles, USA even shouted the slogan of eating the rich, where is this pure racial conflict
It is not just black groups who come to participate in the activities, but many white and Hispanic groups also joined in.
Doesn’t eating rich mean fighting local tyrants to divide the field? This slogan actually appears in the United States, which is known as the most conscious of private property.
Do you think this incident was accidental? It can only be said that the law of historical cycles has come into effect again.
Against the background of the violent polarization between the rich and the poor, class struggle is effective as soon as it is grasped, and the gunpowder keg is a little bit.
Not only poor poor Americans were on the street, many policemen also joined the parade.
In the past, the United States played a great role in alleviating domestic conflicts through various systems, but the reality is that the gap between the rich and the poor is bound to lead to violent conflict.
The most important reason for the collapse of the Soviet Union was the mutiny of the army at the last minute. The background is that various dissatisfaction has accumulated for a long time.
Some people say that those who rob the supermarket are predators. They are just amateur predators who grab some daily necessities. Professional predators never take this.
Looking at the difference between amateur and professional predators in the United States, you can tell who is more professional by just wearing ordinary people.
The main problem in the United States now is the gap between the rich and the poor and the young people cannot see hope.
Animals can’t see hope but can choose to starve to death, and people choose to resist.
05 Star Fire
The word “ism” means to think of something as supreme. For example, capitalism means that capital is supreme.
Therefore, capitalist society will take money as the guide for everything, enterprises are oriented to make money, and government is also oriented to make money.
Therefore, it is not surprising that after the collapse of the Soviet Union, every American president came to power, pursued short-term interests within his term, and ignored long-term interests.
After the globalization of the US manufacturing industry, in addition to high-tech industries, the others are constantly hollowing out, which creates an imbalance in economic development.
In the economic world, only manufacturing and agriculture are creating wealth. All tertiary industries, whether financial or service, serve both.
By reducing the operating costs of creating wealth, Sansan creates more jobs and cultivates a wider consumer market.
The employment opportunities at the bottom are constantly being deprived in the globalization of manufacturing transfer, and the money earned by the top layer from globalization will not be distributed to the bottom world.
The United States has not done any policies or actions to alleviate poverty and increase bottom-line income. Issuing food stamps and not starving to death is the last guarantee that Lao Mei gives the bottom.
In addition, after the industrialization of education, the bottom cannot receive any good basic education, and these people have become increasingly anti-intellectual and violent.
In the context of extreme polarization between the rich and the poor, the anti-intellectual and stupid bottom will become very dangerous and more prone to incitement. This is a lesson from the history of the Qing Dynasty.
Now many anti-intellectual behaviors in the United States are breathtaking. From ground level organizations to anti-vaccines to anti-Bill Gates.
Many people think that the American society is chaotic or the poor are unlucky. A group of fools are not tossing themselves.
The elite class, such as the rich, will not be affected, because they have isolation, police, and security.
This may be the case in the short term, but society is a complete system, and no part exists in isolation.
If later social violence becomes normal, the rich will vote with their feet to escape to a safe place.
A spark of fire can start a prairie fire, and now almost all states in Lao Mei begin to participate in demonstrations.
What is happening here today and what is tomorrow tomorrow will eventually lead to what?
Moreover, according to a report by the Russian Satellite News Agency, the conditions of the Beverly Hills, the top wealthy area in the United States on June 1, were not as good as imagined.
The United States is now in a period of the greatest disparity between the rich and the poor, with one of the most powerful army and a batch of the most agitated unemployed army.
What spark will the combination of the three produce?Shortly after the last time the red and blue lines crossed, the sparks of the Great Depression and World War II came out
The current historical background is very similar.
06 Desperate poor man
People who haven’t read much about history always think that this is a small thing. After the violence, social contradictions will be released and then calm down.
In fact, if you look back at history, each dynasty lasted for hundreds of years, and it was first suppressed by small-scale riots, and social contradictions were continuously released in the process.
Every time the conflict ends, it will be calm for a while, but if the essential thing that the gap between the rich and the poor is too large is not resolved, the dynasty will eventually be subverted.
Now that the United States is still in power, the parade and riots will eventually be quelled.
But the irreconcilable contradiction that the gap between the rich and the poor brings to the entire society cannot be resolved, and it will intensify in the future.
In the past, with the collapse of asset prices, some financial institutions went bankrupt, causing people at the top of the food chain to pay some price.
This time it was different. As soon as the asset price fell, the Fed immediately took action. Then the US stock market rebounded quickly, and many billionaires even made new highs.
At the same time, the global due to the new crown led to a major shutdown, ordinary people can not get out of the door.
There is no consumer demand. Many SMEs go bankrupt and the poor lose their jobs.
The most divisive thing now is that the richest people control a lot of resources and their incomes are growing faster and faster. The poorest people lose their jobs, have no income, and can only live on relief.
The rich are safe and sound, and the poor have suffered heavy losses. Social contradictions have not disappeared, but are suppressed in people’s hearts.
The last time the Great Depression the United States was able to carry it, it was under external pressure that Roosevelt forced the rich to make a profit through the New Deal reform.
The heavy taxation of capitalists and the protection of the lives of the people at the bottom have taken two steps, alleviating social conflicts.
Only then can it be carried out until the outbreak of World War II to save the United States, and the United States has not moved towards a fascist path of division or external expansion.
Da Jinmao did not make Roosevelt-style reforms, and began to reduce taxes for the wealthiest class from the beginning.
He succeeded in the election because of the serious polarization between the rich and the poor and social contradictions, but the series of measures he took later are further widening the gap between the rich and the poor and intensifying the social conflicts.
Yin is very happy to eat Maoliang, but in the end it will pay a price, and this time it may be very expensive.
The growing polarization of the rich and the poor has made the American socialist ideology turbulent in the past two years, as evidenced by Sanders’ socialist concept being popular among younger groups.
A few days ago, I saw a video of a conversation between a 50-year-old black man and his son, revealing deep despair.
This old man persuaded his son not to take young people to the streets. His son and young people said that I couldn’t do that.
I don’t do it now, you will be as angry as me after 10 years, desperate like my father, and will do the same thing as me
The world was like this when I was as big as you. My dad was in his 50s and his world is still the same. It hasn’t changed at all.
We haven’t done anything bad, but we can’t change anything. My child is only 5 years old, we must come up with a better way.
07 The nature of the crisis
Someone always asked me why you judged “We are standing on the eve of a Great Depression”, and always said that U.S. stocks will go down first and then fall.
In fact, the reason is very simple. This year, a large number of corporate bonds will expire. Here, the Fed needs to release a huge amount of water to continue its life. The reason is that Jin Mao daily put pressure on the Fed.
The arrival of the new crown epidemic caused economic stagnation and triggered large downward fluctuations in the stock market.
Here the Fed will surely save, and the flooding of the currency will allow the market to complete an upward stroke afterwards.
However, no matter how it is saved, all policies can only “delay” bankruptcy and “temporarily” avoid the crisis.
The reason for the temporary and postponement is because the occurrence of economic crises is an objective law and does not use human will as a shift.
The economic crisis is usually caused by the sharp differentiation of the rich and the poor brought about by differences in productivity levels and the decline in the real economic profit rate.
After encountering an economic crisis, central banks of various countries usually rescue the economy through monetary policy and fiscal stimulus.
In the absence of technological breakthroughs, monetary and fiscal stimulus cannot improve the polarization between the rich and the poor and save the real economy from declining profits.
Moreover, the low-interest currency environment is often used by Wall Street to create a bubble economy that requires a lot of capital accumulation, such as the housing market and the stock market during the US subprime mortgage crisis.
The US domestic turmoil is essentially a technological revolution caught in a bottleneck, unable to bring new economic growth.
The elites continue to engage in counter-cyclical regulation and control. The wealthy with channels and capabilities are able to plunder the poor through debts, leading to a gap between the rich and the poor.
The essence of the bubble economy is a game of wealth redistribution. As much as the wealth generated in the early stage, there will be as many losses as the burst.
If the scale is large enough, if there is no external capital injection to cover this shortfall after the rupture, it will be the Great Depression.
During the 2008 financial crisis, the United States injected nearly 8 trillion US dollars into the impending collapse of the financial system, while US government debt increased by more than 10 trillion.
This is actually to make up for the lack of corporate profit margins with government losses and to avoid the collapse of the real economy.
However, this has only temporarily delayed the arrival of the crisis, pushed the problem back, and failed to fundamentally solve the problem. The flood of funds behind it has also brought a bull market for US stocks for more than a decade.
The U.S. stock market has developed to this point, and whether monetary policy is tightened or released, it is ultimately powerless.
It is not unprecedented to tighten the Fed, but the existing debt in the society is already very large. This part of the debt is actually wealth in the hands of the rich. To reduce the scale of debt, they need to spit out their wealth.
During World War II, it can be levied forcefully, and post-war prosperity can be achieved through the collection of heavy taxes. Now this condition is completely absent.
If you want to reduce debt by shrinking the balance sheet, it will definitely lead to an economic crisis, because US stocks have risen to a 10-year high.
The main driving force behind the rise of US stocks is low-interest loans and repurchases. If the balance sheet shrinks, the bubble will be pierced in advance.
The lower left corner of the rectangle is where the looseness starts, and the upper right corner is where you try to shrink the table. As long as you shrink the table, you will die.
Wouldn’t it be possible to break the bubble without tightening? It will still be broken, this is an objective law, sooner or later.
The bubble collapsed because the book wealth blown up by the bubble could not be realized at all.
Now that the Federal Reserve has lowered interest to close to zero to save the stock market, many companies have begun to repurchase, and the debt will explode before the debt.
The release of monstrous water here is to blow the bubble even bigger, and it cannot save the original bubble.
Let the stock market be speculated by low-interest loans through repurchases, continue to expand until it bursts naturally, the bubble will be larger, and the wealth shrinkage and destruction effects will be greater.
Once the old and American collapsed, it will repeat the tragedy of 1929, triggering the world economic depression.
All are dead, choose to release water will die a little slower, so still take care of the moment. Seeing this, the logic of going down first and then going up the waterfall should be smooth.
Last time we made a prediction, which happened to overlap with the timeline of US stocks going down and then up again. The article has been 88, we will post the final conclusion here.
If the epidemic can end in 2020, then we will all see high growth in economic data before the beginning of 2022, which is the last boom before the big crisis.
It is foreseeable that this prosperity may rely on investment and inventory replenishment cycles to achieve currency expansion. Investment is mainly in infrastructure, and inventory replenishment activities are mainly upstream cyclical products.
Periodic products need to be driven by demand. Later we should see that the world will start a new round of large-scale infrastructure construction.
2021 is a year similar to 2007. Speaking of 2007, everyone will definitely remember the historical high of the Shanghai Composite Index of 6124 and the madness of commodities at that time.
From the perspective of the cycle, the period from 2019 to the end of 2021 is also the period of expansion of the Kechin cycle, corresponding to the super bull market in the stock market.
Our expectation is that the Shanghai Stock Exchange Index will hit a record high in early 2022, and the madness of A shares will exceed that in any history.
There is no crisis without madness, and there is a great crisis only after the great madness, which is what Tiandao is all about.
In 2022, after the new high of the US stock market, a new round of debt will also expire, and the debt crisis will trigger a global financial crisis similar to 2008. Later extended to the economic crisis and the global depression, the international hot money will choose to flee the United States and flood into China.
As we have written before, the crisis will bring about changes in the world order and national strength.
Our country will also rise in the following crisis, and the influx of international funds is our booster.
Of course, I am not alone in feeling this way.
In 2016, Buffett’s old partner Munger said in an interview: The United States is approaching the culmination of civilization, and the probability of civilization declining is 100%.
And the old man also said that if 50 or 100 years later, the United States may be only a third of a country in Asia, I would not be surprised at all. If you want to gamble, the best thing to do in this world is Asia.